Molly White's Citation Needed - Issue 104 – World Tyranny Financial

Episode Date: April 20, 2026

As the Trump family’s crypto dealings raise more alarms, crypto enforcement is falling to new lows. Originally published on April 20, 2026.

I'm Molly White, and you're listening to the audio feed for the Citation Needed Newsletter. You can see the text version of the newsletter online at citation needed.news. Issue 104, World Tyranny Financial. As the Trump family's crypto dealings raise more alarms, crypto enforcement is falling to new lows. This issue was originally published on April 20, 20, 26. The Trump family's world. Liberty Financial is borrowing against its own thinly traded token. New reporting suggests the company

may have partnered with individuals connected to a U.S. sanctioned human trafficking operation. And Justin's son, who is among the project's earliest and largest investors, has denounced it as, quote, world tyranny, not World Liberty Financial, as his $75 million investment remains frozen. As the president's family's shady dealings continue to mount, SEC enforcement actions have collapsed to 20-year lows. The CFTC says it doesn't need staff when it has AI. The nominee for Federal Reserve Chair is deeply invested in crypto and AI. And the new leader of the Justice Department is the guy who shut down the agency's crypto enforcement, despite an ethics commitment not to participate in crypto matters before divesting his own personal crypto wealth.

Trump Business Interests Controversies are once again brewing around the Trump family's World Liberty Fund. financial project, which is promised since its 2024 launch to produce some kind of DeFi crypto trading application, but which has so far mostly just sold hundreds of millions of dollars worth of its own WLFI token and issued a stable coin. The Dolomite loan. World Liberty put up 5% of the entire WLFI token supply, worth a notional $450 million at the time, as collateral on the DeFi lending platform, Dolomite.

Against this collateral, they borrowed about $65 million worth of USD1, World Liberty's own stable coin that other users had deposited into Dolomite, and another $10 million in USDC. The WLFI token has dropped 20% to a new low of around 7.7 cents. Some observers saw this as an attempt to offload the thinly traded token while saddling Dolomite with a loan they never intended to repay. Quote, don't be exit liquidity for Trump's cartoon. tell, warned a pseudonymous crypto commentator in a popular tweet. Quote, those loans will likely

never be repaid. Instead, when Trump leaves office, or even after the midterms if Republicans lose, WLFI will dump, and Dolomite will be stuck with bad debt. Others fear a death spiral. If the WLFI price drops enough to trigger automatic liquidation, dolomite would be forced to dump huge amounts of the thin-leave traded token on the market, crashing its price even further. And many were furious about the practical impact on ordinary Dolomite users. Because of the position's size, over half of all assets held as collateral on Dolomite, users who had loaned their USD1 to the platform in hopes of earning yield found themselves unable to withdraw their funds until World Liberty repays the loan. World Liberty has defended the loan by dismissing concerns as FUD, an acronym for fear, uncertainty, and doubt that is widely used in the crypto sector to deflect criticism.

They wrote that the loan was, quote, nowhere near liquidation, and that they could always supply more collateral if the WLFI price continued to drop. They also described World Liberty as a, quote, anchor borrower on Dolomite, quote, generating the yield that makes WLFI markets compelling for everyone else. The team later announced that they had repaid $25 million of the loan in two payments. CoinDesk noted that World Liberty Financial had minted $38.5 million of new USD1 in three years. batches over five days, and that, quote, these minting activities track directly with the repayment timeline. While CoinDesk doesn't come out and say it, there are serious concerns with a project using tokens it issues, both as collateral and principal, as this creates the ability to manufacture the appearance of repayment without any real de-leveraging, while the actual risk stays with

Dolomite's depositors. Conflicts of interest. The ties between Dolomite and World Liberty intensified concerns. Dolomite co-founder Corey Kaplan has served as an advisor to World Liberty Financial since shortly after its launch and has since been described as the company's chief technology officer. One of the few actual services World Liberty provides, the WLFI Market's Lending and borrowing web app, is essentially a re-skinned version of Dolomite's product. Quote, the borrower and infrastructure are linked, same circle on both sides of the trade, wrote Twitter user Star Platinum. The setup drew comparisons to FTX, whose circular borrowing with sister trading firm Alameda Research and reliance on its self-issued FTT token ultimately caused its collapse.

And suspicions intensified, when WLFI moved around $40 million in stable coins to Coinbase Prime, a platform for institutional trading or cashing out crypto to dollars. Quote, just a few hours before Trump announced the Iran ceasefire, World Liberty FI sent $40 million plus. in stable coins to Coinbase, wrote Twitter user Ethan Defy. Did they use these stable coins to long the markets, knowing what Trump would announce? Justin's son jumps in. The Dolomite controversy drew one particularly high-profile complaint from Justin Sun, the shady crypto billionaire who has poured $75 million into World Liberty Financial and invested or committed to invest $148 million more into other

Trump-linked crypto projects. Despite having received substantial benefits after his Trump investments, including an SEC settlement on fraud charges, an apparently dropped criminal investigation, and a NASDAQ listing for his company Tron, brokered by the Trump family-linked Domini securities, Sun seized on the Dolomite situation to air his own grievances. Sun's complaints stem from September 2025, when World Liberty blocked his wallet from trading WLFI tokens. The freeze was part of a broader action against 272 wallets, most linked to fishing attacks or compromised accounts, though World Liberty listed one unnamed wallet as, quote, suspected of misappropriation of other holders' funds. Some speculated this was Sun's wallet,

theorizing he'd been selling tokens through his HTX exchange using his customer's positions. World Liberty won't say. Sun claimed that the ability for World Liberty to freeze tokens was never disclosed to him, and that the company had taken actions, quote, to extract fees from users, to secretly implant backdoor controls over user assets, to freeze investor funds without disclosure or due process, and to treat the crypto community as a personal ATM. He further alleged that the project had not followed proper governance processes, with votes authorizing some of their actions, and had withheld information, restricted participation, and predetermined the outcomes. World Liberty Financial quickly fired

back with a tweet. Quote, does anyone still believe Justin's son? Justin's favorite move is playing the victim while making baseless allegations to cover up his own misconduct. Same playbook, different target. WLFI isn't the first. We have the contracts. We have the evidence. We have the truth. See you in court, pal. I think I speak for everyone when I say, please, please, please, take this to court. Justin topped a leaderboard to attend the second Trump meme coin event scheduled for this coming weekend, which could make for some awkward lunch conversation. However, given the all-day event at Trump's Mar-a-Lago club in Florida, coincides with a White House correspondence dinner in Washington, D.C., there's some chance Trump won't

show. Fine print on the meme coin website reserves the right to provide a, quote, limited edition Trump NFT, in lieu of the president's attendance, which is sort of like promising to send concertgoers a JPEG of the band if they don't show up. Sanctioned Partners. World Liberty is also facing scrutiny over its November 24 partnership with a firm called AB. Reporting from the Organized Crime and Corruption Reporting Project and the Sunday Times alleges that when World Liberty partnered with AB, AB's operators were working on and promoting a resort project in conjunction with Yang Jin, who had been sanctioned by the U.S. Treasury in October 24 for his connections with the Prince Group. Along with the sanctions, the Treasury seized $14.4 billion in Bitcoin, based on allegations that the

Prince Group has been operating a network of scam centers, from which employees try to befriend or romance their targets in order to defraud them. The employees are themselves allegedly victims of human trafficking, held hostage, and forced to work. OCCRP writes that, quote, there is no evidence that AB is directly connected to the Prince group or that illicit funds flowed into the resort project. There is no. suggestion that World Liberty or any other political figures were aware of sanctioned people's prior involvement. But the Sunday Times comments, quote, for a company co-founded by the sitting president to go into a relationship with a business recently associated with members of the Prince Group is remarkable,

especially given the vigor with which the U.S. authorities had denounced the organization a month earlier. The Times article was later updated with a notice that both the Prince Group and World Liberty Financial had filed legal complaints over their reporting. In regulators, SEC. The SEC has finally, belatedly reported its 2025 enforcement results, revealing that enforcement actions fell more than 20% compared to the previous fiscal year. Of the 456 enforcement actions brought during fiscal year 2025, nearly half were initiated before Trump returned to office. The agency characterized its retreat from crypto enforcement as a, quote,

necessary course correction, stemming from the previous list. leadership's, quote, misinterpretation of the federal securities laws. Offering a thin veneer of continued vigilance, the press release highlights two token examples of crypto enforcement actions. One is the action against Unicorn, an investigation that began during the Biden administration and continues only because Unicoin rejected the SEC's settlement offers. The SEC's enforcement data was quickly met with a letter from Senator Elizabeth Warren, who wrote that the downward trend in enforcement actions was, quote, deeply disturbing,

and that the data, quote, raised significant concerns about Chairman Atkins' candor with Congress in his February hearing. At the time, when Senator Warren noted that the SEC under his leadership had brought fewer new enforcement actions than at any point in the last 10 years, Atkin replied, quote, I'm not sure what data you're looking at because we actually haven't released our data yet, but I would disagree with your premise. Now that the SEC has published its numbers, it shows that the number of enforcement actions are actually at a 20-year all-time low. The agency is also working on a safe harbor framework for crypto, which Chair Atkins has been calling reg crypto. This would further pare back SEC oversight of the sector by exempting early crypto projects from full registration for a four-year period, and by allowing projects to sell tokens that would typically qualify as securities under the Howie test, under a, quote, investment contract safe harbor.

Speaking at a crypto event, Chair Atkins urged the industry to get involved in the midterm elections to ensure that Congress will continue deregulating crypto alongside the SEC. Quote, we've got to make sure that your friends are in Congress. I think you saw how that really paid benefits in the last election, he said. CFTC. The CFTC still has only a single commissioner out of its usual five, has cut a quarter of its staff, and is facing a significantly expanded workload after staking claim over both the crypto sector and the rapidly expanding world of prediction markets.

But Chair Selegg says not to worry. They're using AI to make up for the lack of actual investigators and enforcement attorneys. Either the remaining CFTC staff or their AI software have reached some settlements lately. The offshore Q-coin crypto exchange will pay a $500,000 penalty and stop serving U.S. customers for at least two years, as the result of a 2024 lawsuit, alleging they had operated an unlicensed derivatives exchange, failed to register as a futures commission merchant, and failed to implement sufficient programs to identify their customers. The CFTC's case had been filed alongside a criminal case that resulted in a $300 million fine in February 2025. The CFTC has also settled its case against

Nishad Singh, the former head of engineering at FTX. Singh had faced criminal charges along with bankman freed and three other executives of the collapsed exchange, but avoided jail time. Now he's agreed to pay $3.7 million in disgorgement, which represents the value of real estate Singh purchased in October 2022 using funds from his FTX account, quote, that he knew or recklessly disregarded the fact that they consisted, at least in part, of misappropriated FTX customer assets. Singh is prohibited for five years from commodities trading and for eight years from applying for CFTC registration or working for CFTC registered entities. In the courts, Alex Machinsky.

Alex Michinsky, who is serving a 12-year sentence for fraud and market manipulation as CEO of the Celsius cryptocurrency platform, has written to the judge overseeing his case with a pro se motion claiming, quote, new evidence has come to my attention, which implicates my attorneys as constitutionally ineffective. He argues this evidence would have significantly reduced his guideline sentence and asked the judge to appoint counsel to help him prepare a habeas petition. He says he cannot afford private counsel following asset seizure and forfeiture. Machinsky was represented by Mark Muckeesie, at the time a partner at Muckezy Young. Muckeesie had previously represented then-private citizen Donald Trump in a 2019 lawsuit to avoid disclosing his tax returns to a Manhattan district

attorney and Sam Bankman-Fried in his sentencing-related matters, though not during his criminal trial. The judge denied the request, explaining that, quote, the right to appointed counsel extends to the first appeal of right and no further. Because Mishinsky pleaded guilty and never filed an appeal, the 14-day deadline to inform the court he intends to appeal has long since passed, he missed that chance. While the judge informs him that he does have discretion to appoint counsel in habeas cases, he tells Mishinsky he must first demonstrate his claim has merit

with the resources available to him. Uga Labs versus Rider Rips The long-running case by Yuga Labs against artist Rider Rips has ended. The court had initially decided that Rips and his co-defendant would have to pay $1.4 million in disgorgement, around $200,000 in damages, and a massive $7.3 million in attorney's fees and costs after the court found the defendants had been, quote, obstructive and evasive, and made, quote, disgraceful and slanderous statements about Yuga, its founders and its counsel, throughout the case. But on appeal, the Ninth Circuit reversed the decision to grant summary judgment

in favor of Yuga, determining that the question of whether buyers were truly misled by RIP's knock-off apes was one for a jury. Rather than go to trial, the two parties have settled the lawsuit. The terms of the settlement aren't entirely clear, but the defendants will be prohibited from using the BoardApe trademarks, providing benefits to holders of the RR-R-B-C-NFTs, or registering or operating websites or social media accounts using Yuga Labs marks. The smart contracts and web domains that were transferred to Yuga as part of the original decision will remain with Yuga, and the defendants have agreed to transfer any remaining NFTs or domains to the company. All their fake apes gone. In Congress, the Clarity Act draft cryptocurrency market structure bill continues its familiar pattern this

month, repeated promises from senators and industry figures that it will imminently be released and past Senate markup, followed by repeated delays. On April 8th, the White House Council of Economic Advisors released a report backing the crypto industry's view that stable coin issuers should be allowed to offer yield on investor holdings. This contentious portion with the Clarity Act has driven much of the bill's delay, after bank lobbyists strongly objected over concerns that yield-bearing stablecoins could dramatically diminish bank deposits and lending.

The council's report concluded that prohibiting stable-exempts, coin yields would increase bank lending only marginally, quote, while foregoing the consumer benefits of competitive returns on stable coin holdings. Bank lobbyists, however, have pointed out that the council studied the wrong question. Their concern isn't whether prohibiting yields would increase deposits, but whether permitting them would decrease deposits. There has been extensive coverage of the ouster of former Attorney General Pam Bondi, but far less attention paid to her acting replacement, who was previously the Deputy Attorney General taught Blanche. A former personal lawyer to Trump, Blanche was nominated shortly after Trump's election and confirmed in March

2025. Barely a month into the position, he issued a memo dismantling the Department of Justice's National Cryptocurrency Enforcement Team, directing the agency's market integrity and major frauds unit to, quote, cease cryptocurrency enforcement, and ordering prosecutors to, quote, not charge regulatory violations in cases involving digital assets, including but not limited to unlicensed money transmitting, violations of the Bank Secrecy Act, unregistered securities offering violations, unregistered broker-dealer violations, and other violations of registration requirements under the Commodity Exchange Act, unless they have specific knowledge that the defendant knowingly and willfully violated a specific requirement. He issued these directives before divesting between $159,000 and $485,000,000,

$5,000 in crypto holdings, despite having pledged not to participate in any matter that could have a, quote, direct and predictable effect on his financial interests in the virtual currency. Trump's pick to lead the Federal Reserve, Kevin Warsh, has submitted financial disclosures ahead of his Senate confirmation hearing. Scheduled for Tuesday, though Senate banking Democrats have urged for the hearing to be delayed due to the criminal investigations into federal reserve officials. The 69-page disclosure reveals extensive cryptocurrency investments, including stakes in the DYDX decentralized crypto derivatives exchange, crypto-focused investment firm Polychain, the Lightning Network Payments Protocol, Sports NFT Platform Match Day, and blockchain firms Solana, blast, and

optimism. Some investments are relics of crypto's frothier days, like Friends with Benefits, a Dow-run Discord server that Andreson Horowitz valued at $100 million. in 2021, after it promised to build, quote, the very first IRL metaverse. Warsh's investments extend well beyond crypto, spanning artificial intelligence, a lot of it, healthcare, and defense tech, with highlights including a, quote, robotic coffee bar platform and a, quote, digital persona cloning platform that claims to let people create AI clones of themselves to handle their work.

In Elections and Political Influence. As I wrote recently, in my first notes, posted post, the fellowship pack is showing signs of life. I've been watching it closely ever since it claimed to have $100 million, quote, committed for the elections, but then reported $0 in fundraising in its 2025 end-of-year filing. But its Q1-26 filing has revealed it's brought in $11 million in contributions, primarily from Cantor Fitzgerald, the financial services firm previously run by Commerce Secretary Howard Lutnik. Lutnik, quote-unquote, divested by selling the company to his two 20-something sons.

Fellowship Pack is using the funds to back a slate of MAGA candidates, including Clay Fuller and his runoff special election for Georgia's District 14, Nate Morris and his Kentucky Senate bid, and Pete Ricketts in his Nebraska Senate re-election campaign. So far, Fellowship Pack has spent $1.5 million in independent expenditures backing these candidates. The spending also traces a web of crypto industry and government connections. All of the PAC's independent expenditures, plus an additional $3 million in so-called issue advocacy advertising, flow through Nexham Group, a firm co-founded by Bo Hines, the former director of Trump's Crypto Advisory Council,

who is now CEO of Tether U.S. Fellowship PAC itself is led by Jesse Spiro, Tether U.S.'s head of government affairs, and Cantor Fitzgerald and Tether share deep ties. In prediction markets, CalShe has appealed Nevada's ban. on prediction markets to the Ninth Circuit. During oral arguments last week, one judge dismissed as, quote, sophistry to the nth degree, Kalshi's longstanding argument that prediction markets fundamentally differ from sportsbooks and casinos because betters trade against each other rather than against the house. But in New Jersey, the Third Circuit has sided with Kalshi,

overturning a ban and opining that the platform's event contracts do indeed fall solely under the CFTC's jurisdiction. It seems likely to me at this point that this is a question destined for the Supreme Court. As I've mentioned in the past, the federal government and regulatory agencies have joined the fight on the side of prediction markets. On April 2nd, the CFTC and DOJ filed a lawsuit against Arizona, Connecticut, and Illinois, arguing that the state regulators are encroaching on the CFTC's exclusive regulatory authority over prediction markets. One of the DOJ attorneys on the case is Yaakov M. Roth, now a principal deputy assistant attorney general. In 2023, while at Jones Day, Roth represented Kalshi in its lawsuit against the CFTC that ended with a finding that the CFTC had overstepped and allowed for the explosion of prediction markets we've seen in the years since. Now he's working alongside the CFTC to advance a legal position that benefits his former client.

At a hearing in front of the House Agricultural Committee, which oversees the CFTC, Chair Seelig faced predictable fury from Democrats over prediction markets. Seelig was evasive throughout, avoiding even simple questions about whether government officials should be allowed to place prediction market bets on non-public information. Representative McGovern, a Democrat from Massachusetts, pressed the corruption angle, questioning why Donald Trump Jr. would be an advisor to two competing prediction markets platforms. He asked if anyone at the White House had demanded or implied that the CFTC should drop its probe into polymarket, a question that CLEG again indignantly dodged. So, Mr. Chairman, are you aware that President Trump's son, Donald Trump Jr., has been hired as an advisor for both Kalshi and Paulymarket to competing companies? Congressman, I'm aware of this. And would you say that?

it's accurate than that the Trump family has a financial stake and how these prediction markets are regulated? Congressman, I believe this hypothetical that you're trying to engage in is a political exercise. I don't know how this hypothetical. The President's son is you know you know involved with both of these companies I mean he makes a lot of money for it but of course they have a financial interest and and all of this I mean the President's son is on the board of both multi-billion dollar prediction market companies. So it seems to me like the only reason two competing companies hired the same person is because they think he must be really, really, really valuable.

I mean, and I wonder why they would think that, right? I mean, but Mr. Seleck, has anybody in the White House ever asked or insinuated that you should drop the CFTC's probe into polymarket? Congressman, we treat all market participants alike. We do not pick winners and looters or engage in favoritism or bring politics into any of these matters. We take them very seriously and I think it's insulting that you're insinuating that we would play. I'm worried because it smells like corruption. I'll be honest with you. Outside the U.S.

Argentina. While United States officials have little appetite to investigate our president's crypto corruption, Argentine prosecutors have proven much more willing to investigate theirs. They have continued digging into the circumstances around February. 2025's Libra fiasco, in which President Milley endorsed a cryptocurrency that quickly plummeted amid questions of insiders cashing out. While Millet has insisted he had no connection to the project and merely was highlighting a project that he'd come across online, prosecutors have obtained telephone logs showing seven calls between Millie and Mauricio Novelli, one of the people

responsible for launching Libra on the night of the endorsement. Messages pulled from Novelli's phone suggests he had been paying Miele, a monthly, quote, salary, dating back to at least 2023. After Miele, then a congressman, endorsed a crypto video game project Novelli was involved in. Additional audio messages indicate Novelli was also making payments to Melae's sister Karina, who has been implicated in the Libra scandal and is widely described as a gatekeeper controlling access to her brother. Last month, Argentine media reported on messages from Navelli's phone revealing what appeared to be a $5 million draft agreement between the president and Libra creator Hayden Davis, the 29-year-old

American CEO of his family's Kelsior Ventures crypto investment firm. The agreement outlined a $1.5 million advance, $1.5 million for a Twitter post from Millet identifying, quote, Hayden Davis slash Kelseyer slash the Davis family as his advisors, and $2 million for assigned, quote, blockchain slash AI consulting agreement with either Mulei or the Argentine government. Poland. Poland's prime minister, Donald Tusk, has accused the crypto exchange Zonda Crypto of sponsoring politicians from the country's national conservative law injustice and far-right confederation of the Polish crown parties.

He has also alleged that Zonda Crypto was funded by the Russian mafia and Russian intelligence services. Among the politicians, he alleges, have been funded by Zonda Crypto, is Polish. President Carol Navraki, who has vetoed two crypto-regulation bills he has described as overly burdensome to crypto businesses. The country's parliament has twice tried and failed to overturn the veto, failing to achieve the 60% majority required. Zonda Crypto also sponsored a CPAC event held in Poland in 2025, where former U.S. Secretary of Homeland Security Christy Noem endorsed Navraki as a Trump-style leader who would, quote, turn Europe back to traditional values.

Zondocrypto has also been facing reports of delayed withdrawals, which has led to speculation that the exchange could be insolvent or dipping into customer funds to meet other customers' redemption requests. Zonda Crypto's CEO has described this speculation as part of a coordinated campaign against the exchange, which he tried to counter by revealing a wallet address holding 4,500 bitcoins, priced at around $330 million, as proof of solvency. However, the keys to that wallet were known only to the exchange's previous CEO, who didn't transfer control of the wallet to the exchange's new owners when the company was sold in 2021. The former CEO has been missing for four years. United Kingdom. The United Kingdom's liberal Democrats are calling for investigations

into Nigel Farage's crypto activities and his involvement with Stack BTC, a Bitcoin treasury company. Daisy Cooper, the Liberal Democrats deputy leader, wrote to the CEO of the UK's financial conduct authority urging an investigation after Farage appeared in a promotional video for the company. She warned that, quote, the Reform UK leader is looking to copy the Donald Trump playbook, citing a January Bloomberg report that estimated Trump had profited around $1.4 billion from his crypto ventures while directing policy for the sector. Cooper also raised questions that Farage was encouraging his audience to purchase crypto assets, pointing to an interview in which he touted crypto's, quote, huge financial returns,

and appeared to endorse his interviewee's prediction that Bitcoin could reach $1 million per token. The Web 3 is going just great recap. There were 10 entries between April 1st and 20th. A massive $615.26 million was added to the grift counter. Avey faces approximately $200 million in bad debt after the Kelp Dow Bridge was exploited, Raive Dow was accused of a pump-and-dump as their token crashed 98%. The Kelp Dow Bridge was hacked for $292 million. Ria Finance was exploited for $18.4 million, though some was recovered.

The Russian Grynex Exchange halted trading after a $13 million-plus exploit. Cow Swap users lost an estimated $1.2 million after DNS hijacking. Users lost $9.5 million to a fake ledger wallet app on the Apple App Store. Hyperbridge was exploited two weeks after an April Fool's hack joke. Bitcoin Depot was hacked for $3.67 million, and Drift was exploited for $285 million. That's all for now, folks. Until next time, this has been Molly White. Thanks for listening to this issue of the citation-needed newsletter. If you would like to support my work with a free or pay what you want subscription to the citation

needed newsletter, or if you would like to receive these issues in your email, go to citation needed.news slash sign up. If you enjoyed the podcast version of this episode, please consider leaving a rating or review in your podcast player of choice.